Ahead of the annual meeting of the World Economic Forum in Davos, the group yesterday released a major report warning that tough economic conditions coupled with frequent extreme weather events represent "an increasingly dangerous mix" for the global economy.

The report draws on a survey of more than 1,000 experts from industry, government, academia and civil society, which rated rising global greenhouse gas emissions as the third most likely global risk to manifest itself over the next decade, after "severe income disparity" and "chronic fiscal imbalances".

Speaking to BusinessGreen, Rainer Egloff, who works for insurance giant Swiss Re and contributed to the report, argued that climate change was also contributing to other risks identified by respondents to the survey, including concerns over food and water supplies and health-related risks.

"Continued stress on the global economic system is positioned to absorb the attention of leaders for the foreseeable future," the report warned. "Meanwhile, the Earth's environmental system is simultaneously coming under increasing stress. Future simultaneous shocks to both systems could trigger the 'perfect global storm', with potentially insurmountable consequences.

"On the economic front, global resilience is being tested by bold monetary and austere fiscal policies. On the environmental front, the Earth's resilience is being tested by rising global temperatures and extreme weather events that are likely to become more frequent and severe. A sudden and massive collapse on one front is certain to doom the other's chance of developing an effective, long-term solution."

Lee Howell, editor of the report and managing director at the World Economic Forum, urged policy makers to take urgent action to address inter-related environmental and economic risks.

"These global risks are essentially a health warning regarding our most critical systems," he said. "National resilience to global risks needs to be a priority so that critical systems continue to function despite a major disturbance."

His comments were echoed by John Drzik, chief executive of the Oliver Wyman Group, which contributed to the report. "Two storms - environmental and economic - are on a collision course," he said. "If we don't allocate the resources needed to mitigate the rising risk from severe weather events, global prosperity for future generations could be threatened. Political leaders, business leaders and scientists need to come together to manage these complex risks."

However, Egloff warned businesses attempting to get policy makers to engage with climate risks faced significant challenges.
"The report argues that we have the evidence of climate change and the urgent need to invest in tackling the problem, but we also have urgent economic problems that are absorbing the attention of political leaders," he said. "We are seeing decision-making often moving in the other direction and as a result there is a huge risk that the decision to take action on climate change will be delayed."

The report also highlighted growing risks arising from "dangerous complacency" over the threat presented by diseases becoming resistant to anti-biotics and the emergence of inter-connected social media that allows "digital wildfires" to spark unrest.

The fresh warnings from one of the world's most influential business groups comes as Australia battled wildfires across the country and official agencies introduced new colour coding for meteorological maps to represent a record heat wave.

Meanwhile, reports emerged of a World Bank presentation delivered at last year's Doha Climate Summit warning average temperatures in Gulf states are on track to increase by a further three degrees by the middle of the century.